Where to start investing?

Question

In the event that you guys have an estimate of about $50K liquid. How are you starting out? Do you look at fix and flips if you’ve never done them or buy and hold which you also haven’t done?

Kaja Baum · Answer

Hello and welcome @Robert Baez!

What @Jesse L. Weaver said is right on the money. It depends on your goals and risk appetite. I'd add house hacking to the potential list since if it's your first purchase then it makes a lot of sense to not be renting if you're paying anything close to market rate rent. Plus, if you already own a primary, congratulations on your first investment property! You can buy a second one now.

Just keep in mind that if you're doing a fix and flip or Brrrr, be sure to calculate a generous overage with your holding and rehab costs. Especially your first time around. Things go wrong and I too often see people saying (especially with hard money rehab loans) that they have X amount of money to cover down payment and that's what they're spending.

Don't feel like your first answer is the forever one either. You might try a class C high cashflow neighborhood and realize you hate it and move to something else for the second property. It doesn't need to be a perfect decision. You just need to make the decision and not screw up so bad that it takes years to recover. Good luck!

Jesse L. Weaver · Answer

This depends on your end goal! Are you looking to replace your income asap? Are you happy at your job and just looking for a safe way to invest?

Fix and flips are going to be high risk/high reward. Low class, high cash flow properties are going to be high risk/high reward. A boring B class turn-key townhome might not cash flow well but should be the more "hands-off" way to go. Decide where you want to be in a year, 5 years, 20 years, and work backwards from there.

Sandhya Sapkota · Answer

If you've got around $50,000 and just starting in real estate, house hacking would be a good one.  You could rent out part of your place like a basement. You'll earn extra cash while living there to lower your mortgage.  Just make sure to check the rules and crunch the numbers before diving in!

Chris Merchant · Answer

Awesome, sounds like house hacking may be a great opportunity than.  Now it's just a matter of locating the right deal even if you start out with a small multi-family property that you can get for the right price but may need some fixing up, there is the FHA 203k loan too that as long as it is a 1-4 unit property you can buy the property and fund renovations through the loan and it only requires 3.5% down.

Robert Baez · Answer

Love the area we are in. Have not purchased. Lived in VA for a year now.

Alfath Ahmed · Answer

The Columbus market is great for real estate investors to get started. There are areas that I recommend in the Columbus market that I personally invest in like Old North, Old Town East/King Lincoln Bronze Ville, Merion Village, Driving Park, North Linden, Hungarian Village, Bexley, and North Hilltop. These are all great areas that you can buy investment properties in and let your net worth skyrocket.

These are all areas within the Columbus market that is next to an economic base. They are surrounded by economic development which is causing a good increase in population and rent growth. I just read a published article today by the Columbus Dispatch that Franklin County home values are supposed to rise by 30-35% with re-appraisal. We have had nearly a 39% property value gain from 2019 to 2022 in the Columbus market. Let me know if you need information on the Columbus market or just want to simply hop on a call and discuss.

Kaja Baum · Answer

@Robert Baez I feel your pain. I had the same issue starting out in Stafford. You don’t need a multi to house hack though. Depending on what you’re willing do try, I’ve had great experiences renting a bedroom. Or you can find something with a basement with a bathroom and separate entrance. Sounds scary but honestly, we vet people well and have had no problems.

Chris Merchant · Answer

Do you currently own the house you're living in? If so are you happy there?

Where to start investing?

Most Popular Reply